The trend of 2018 had been China trying to sell off most of its overseas assets. Contrary to what this action suggests, the overseas purchasing spree of most Chinese citizens still allowed properties to remain with Chinese hands.
The Star suggested some prime properties, such as New York's Waldorf Astoria and Chicago's Vista Tower, as some properties which still are in Chinese hands after all. Chicago's Vista Tower, for one, is still being constructed. It has been seen, however, to be one of the tallest buildings in the city once it is finished.
Beijing has tried to keep on top of things, enacting policies to keep the cash flowing within the country for the time being. The trade dispute with the US notwithstanding, it is trying to keep things better for the citizens with policies such as limiting foreign property purchases. This included bands on borrowing and liquidation of property. So far, the effects have yet to be felt, as the policies only started to take effect near the end of the year.
2016 and 2017 had been years where Chinese investors saw the beauty of overseas investments. 2018, however, have seen things like defaults in corporate bonds and the economy losing steam due to various issues. Yahoo SG reported that the property sector has some issues to resolve as well.
Bonds are the least of the market's concerns. It has debts to take care of, trust and bank loans to keep an eye on, and a total of 15.6 trillion yuan (US$ 2.27 trillion) in all of these to figure out. This is more than double the amount of three and a half years ago, Lu Ting, China chief economist at Nomura, lamented.
China's slowing economy has also affected property development. A lot of properties have not found buyers, and developers have come into sizeable debts as a result of this. Most developers have fallen into the trap of trying to look funds for new homes for China's citizens. A lot of them have found themselves debt-ridden.
The biggest hope for the economy remained in China's considerable assets in the foreign property market. There is no shortage of interested buyers knocking on investors' doors. There is a consortium Ping An Real Estate and China Life Insurance Co are members) that managed to sell off a 13-story Boston property for US$450 mil. That's only the start, according to CBRE's Tom Moffat.
Perhaps, as the year moves on, there will be a lot more foreign properties that will serve as a sort of stimulus. Until that happens, however, investors have to find the right buyers and sell at the right price to recover.
